AUD/FJD Outlook:
The AUD/FJD rate is slightly positive but likely to move sideways, as it is above its recent average while currently trading near recent lows. Mixed signals regarding both Australian and Fijian economic indicators create uncertainty.
Key drivers:
- Rate gap: The Reserve Bank of Australia indicates a potential for further interest rate hikes, contrasting with the stable monetary policy of the Reserve Bank of Fiji.
- Risk/commodities: Global demand for Australian commodities is buoyant, particularly from China, which supports the strength of the AUD against the FJD.
- Economic growth in Fiji: Fiji's forecast for modest economic growth may limit any significant appreciation of the FJD in the near term.
Range:
AUD/FJD is likely to test extremes within its recent 3-month range, as fluctuations in both currencies could prompt shifts.
What could change it:
- Upside risk: Strong Australian inflation data could increase expectations for rate hikes, further strengthening the AUD.
- Downside risk: A significant slowdown in Chinese economic activity might weaken demand for Australian exports, pressuring the AUD.